Post Brexit insight: Overseas interest in British brands

The British Retail Consortium (BRC) Google Online Retail Monitor for Q4 2016 showed that the volume of overseas customers searching for UK retailers grew 23% across all devices in the last three months of 2016, compared with the same quarter a year ago.

In the UK, search volumes on mobile devices increased 16% in the fourth quarter of 2016 compared with the same quarter a year ago. Croatia demonstrated the strongest appetite for UK retailers, reporting a 106% increase on mobile devices in the fourth quarter of 2016

Helen Dickinson OBE, Chief Executive, BRC, commented: “Digital continued to play a pivotal role in driving sales for UK retailers in the final quarter of 2016. In December, the online penetration rate for non-food remained above 20 per cent for the fifteenth consecutive month and the channel won its greatest share of Black Friday and Christmas sales to date. It is no surprise therefore that today’s figures, which show high double digit growth of mobile search volumes across most UK brand categories, are consistent with this trend.

“At home,the top trending searches reveal that seasonal occasions and events prompted the highest volumes of browsing activity. Meanwhile, the attention of overseas consumers was drawn to the apparel and beauty brands which demonstrated the strongest growth in category searches on a mobile device, with an impressive 64 per cent and 50 per cent increase respectively.

“This quarter’s figures provide further evidence that the EU is an increasingly important market for UK retailers and that consumers from the continent are increasingly likely to be experiencing the British retail offer through their smartphones. The challenges and opportunity for UK retailers to capitalise on this rapid growth persist and British businesses remain focused on tailoring their e-commerce offer to utilise the strength and popularity of UK retail beyond our own borders, which shows little sign of diminishing.”

Carola van Dyke is one of many great British companies exhibiting at Source British in Los Angeles this March

Meanwhile the appeal of British brands to our friends across the Atlantic has never been stronger as the new US President vows to strengthen ties with America’s key ally.

Martijn Bertisen, Retail Director, Google, explained that: “Overseas interest in UK brands was up 23% in the last quarter of 2016. Foreign exchange rates have continued to position UK brands favourably internationally, with particularly strong growth from our European neighbours. Increased demand is largely coming from smartphones, with triple digit growth observed in some regions. In this mobile-first world, having a great user experience is crucial for our retailers. A recent Google study found that only five of the top 20 UK retailers’ mobile sites load in less than 2 seconds.”

As the reality of Brexit races upon us, retailers are already having to cope with rising business rates, minimum wage increases and the apprenticeship levy, while suppliers have similar challenges and higher sourcing prices on top in many cases.

Anna Wright stationery

Business owners across the board will be scrutinising their supply chains and renegotiating deals where savings can be made, hopefully without having to compromise on quality. Others could well start to refocus on British manufacturing, as UK products and services become more desirable to overseas consumers.

It is widely thought that consumer-level prices will have to rise to help absorb the shock of these multiple increases, although when this will occur is not yet apparent. Retailers must now figure out if and when they are prepared to risk market share to protect margins. On the upside, if the UK is no longer bound by the Common Customs Tariff applied to the import of EU goods to the UK, the pressure may be eased.

Jan Constantine new season home textiles

An end to this Tariff would mean many products will be up to 4 per cent cheaper, easing the household spending squeeze but not fully offsetting other price hikes. The state of consumer confidence is still an imponderable, although it is thought that many in the UK are tightening their purse strings in this time of uncertainty. On the other hand many British consumers are also proving keen to support local businesses and products made in the UK, also holidaying on home shores in their millions.

How Brexit will affect the rights of EU workers is also an ongoing concern until a solid deal between Britain and the EU is struck. If companies are forced to fall back on British workers to fill their lower-skilled jobs we could be looking at significant wage increases. This may not be a bad thing for households in the long run but short term it is likely to cause a serious headache for many businesses.

The key to it all is to retain optimism and be alert for new opportunities, but also prudent and meticulous on matters of finance. Change can be a very good thing and there are exciting times ahead for the UK if we can properly unite as a country to make the most out of this time of great potential.

Gorgeous greetings by British artist Berni Parker

Helen Dickinson OBE continues: “There are reasons to be optimistic about trade and retail in a post-Brexit world. It’s encouraging that the Government recognises that the UK has a role to play as a champion of free and open trade. However, securing a positive new customs arrangement with the EU, which enables mutually beneficial opportunities for trade with the EU and the rest of the world, will be crucial to ensuring British shoppers aren’t hit with the costs of unwanted import tariffs.

“Making these stated ambitions a reality will require close partnership between the retail industry and UK-EU negotiators. In the short-term, the number one priority needs to be ensuring that Britain’s exit from the EU is orderly, allowing all goods traded between the EU and the UK to be in free circulation.”